Bank Stock: Dalal Street Darlinges HDFC Bank, Axis Bank, and Kotak Mahindra Bank have just been downgrated by domestic brokerage ICICI securities From ‘buying’ to ‘connecting’, because it sees a limited reverse between the expectations of weak proximity performance, especially around the increase in income.
According to brokerage, these private banks will see the pressure on the lenders along with the weak credit increase in the net interest income (NII) and the benefits after the tax (PAT).
While the deduction by the Reserve Bank of India (RBI) is seen as promoting banking counters, ICICI Securities believes that it can pressurize HDFC Bank, Axis Bank and Kotak Mahindra Bank to pressurize the net interest margin (NIMS) and due to a mismatch in debt and deposit.
Pressure on margin
Brokerage explained that the rapid re -pricing of the loan, especially under external benchmark borrowing rate regime, would have weight on NIMS in banks.
